Coalition Urges Franchise Fix in Omnibus Bill

Groups want Congress to restore old joint-employer standard after NLRB threw out decision

The Free Beacon talks to Trey Kovacs about CEI’s coalition letter urging for protections for franchises:

A coalition of taxpayer and business groups wants Congress to include protections for franchise businesses in the omnibus spending bill being negotiated in Congress.

On Tuesday, 19 organizations led by the pro-free market Competitive Enterprise Institute called on Congress to include the bipartisan Save Local Business Act (SLBA) in the upcoming omnibus bill. The bill seeks to reverse the Obama administration’s ruling in the Browning-Ferris case, which held parent companies liable for labor violations committed by franchisors or subcontractors. The act would restore the longstanding precedent that such corporations would have to play a direct role in any alleged violation to be held liable and “would end the confusion and harm to small businesses and the economy caused by the lack of clear joint employer standards,” according to the letter.

“A policy that makes businesses liable for the practices of entities completely outside of their control will cause companies to make changes that leave people worse off, such as ending those relationships with smaller businesses. That means fewer job opportunities, fewer opportunities for entrepreneurs, and fewer chances for American businesses to grow and to create jobs,” the letter says. “Congressional action is urgent and necessary to fix a problem that is negatively impacting countless small businesses and their employees nationwide.”

Trey Kovacs, a labor expert at the Competitive Enterprise Institute, said putting the Save Local Business Act in the omnibus bill would provide a uniform approach to the standard and create certainty among franchisees and their parent companies.

“The legislation would settle ongoing joint-employer confusion by reinstating the rules that employers have relied upon for decades in making decisions on employment and business relationships,” he said.

Read the full article here.